$500 million savings for Medicaid plan

With key votes looming Wednesday, the Legislature’s fiscal advisers released an analysis concluding Medicaid expansion in Louisiana would result in up to a $500 million savings to the state over the first 10 years.

Gov. Bobby Jindal called the analysis “too conservative,” reiterated his objection to the expansion, and advocated repeal of Obamacare, the familiar name attached to the federal Affordable Care Act.

Jindal said the state costs would run $1.7 billion over the first 10 years and continue a broken Medicaid system.

“There is no flexibility ... one size fits all” in the federal law, Jindal said in a brief Tuesday session with reporters.

House and Senate health committees on Wednesday are scheduled to take up legislation filed by various Democratic lawmakers that would require state participation in the Medicaid expansion.

Each committee is majority Republican.

U.S. Sen. Mary Landrieu, D-La., wrote letters to committee members urging support of the expansion and provided reasons why.

On Tuesday, Medicaid expansion proponents held a noon rally on the steps of the State Capitol to encourage Jindal to begin formal negotiations around the terms by which Louisiana would participate.

Joining the gathering that included many red-T-shirt clad AARP Louisiana members were state Sens. Fred Mills, R-St. Martinville, and Ben Nevers, D-Bogalusa.

“We believe we can win a deal for our state that meets your vision of what’s best for our state but to reach a deal you have to be willing to negotiate a deal,” said the Rev. Melvin Rushing, of Baton Rouge, and a member of Together Louisiana representing 120 religious congregations.

“The governor’s perspective is clear. He wants flexibility .... flexibility that governors in other states are winning,” Rushing said. He mentioned high-profile Republican governors of Arizona and Florida among them.

Later in the day, the Louisiana House Republican delegation came out against the expansion legislation, saying the expansion is “just too risky” financially for the state. The delegation noted “growing concern” at the national level about the impact of the health care law on the nation’s budget deficit.

In a statement, the Louisiana Budget Project’s executive director Jan Moller said the decision facing the state is a matter of “life and death” for many working Louisiana residents who cannot afford health coverage. He urged state acceptance.

The Legislative Fiscal Office analysis by Shawn Hotstream concluded that Louisiana Medicaid spending would be $510 million to $554 million less over the first five years.

Over a 10-year period, the decrease in state Medicaid spending would range from $185 million to $510 million, according to the analysis.

People with income of up to 138 percent of the federal poverty level — mainly working adults — would be eligible for the government health insurance program beginning in 2014. Today, that would mean individuals earning up to $1,285 a month. For a family of four, the earning level would be up to $2,651 a month.

The federal government pays 100 percent of costs during the first three years and no less than 90 percent during the first 10 years.

The Fiscal Office analysis accompanies House Bill 110, which would require the state to advise federal officials by Sept. 1 that it would participate in the Medicaid expansion. Program sign-up begins Oct. 1.

The Fiscal Office analysis considered multiple factors, including 290,000 uninsured adults between age 19 and age 64 who would be eligible to participate in the expansion and that all new eligibles would be placed in the Jindal administration’s Bayou Health private sector-based pre-paid Medicaid managed care plan.

The reduction in uninsured adults that the state contributes to currently is also figured in as well as a reduction in prisoner care costs now completely state funded.

Jindal said the Fiscal Office number is too low in its estimate of people who will abandon private health insurance for the new program. He said that shift would trigger increased costs for others with private insurance.

The Fiscal Office analysis also didn’t take into account the potential for provider reimbursement rate increases to meet new access standards, Jindal said. The program could end up being an “unfunded mandate” on the state, he said.

Hotstream said the federal law does not mention provider fee increases.

At the State Capitol rally, Dr. Jule Assercq, a primary care physician, said the Medicaid system is “far from perfect ... But for those with no insurance, having something imperfect is better than having no insurance at all.”

Sen. Mills said Louisiana has worked with the federal Centers for Medicare and Medicaid Services to get waivers to do innovative things in health care.

“If the New Orleans Saints were leaving tomorrow, we could get creative,” Mills said.